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Where can I learn more about Price Action like those in James16 charts? 9 replies

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james16 Chart Thread

  • #133,221
  • Dec 3, 2014 7:20am Dec 3, 2014 7:20am
Quoting kotsh
Hi All, been lurking in this forum for several months now, and it has been the most useful resource I found on the internet with regards to trading! After blowing up 2 accounts I decided to start working on demo until i am profitable for at least 6 month. Thanks specially to Mike for the excellent videos and Phanti for the price action trading ebook! I would like to ask a question about divergence at key levels. I think understand the concept of regular and hidden divergence when the price is trending (up: HL/HH or down: LH/LL). My question is more...
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The appearance of divergence is a sign that a trending market may turn. Other than the particular indicator whether it is MACD, CCI or RSI is irrelevant. In fact divergence is really easily recognized without the use of indicators. But the point here is that divergence is just one small piece of a developing story and shouldn't be used by itself. I personally think it is quite minor. A wedge with an accurate lower border in an uptrend like in the example shown is all you need. A breakout of the rising TL with good PA signals a possible trade.
  • #133,222
  • Dec 3, 2014 7:25am Dec 3, 2014 7:25am
Missed this one!

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  • #133,223
  • Dec 3, 2014 9:00am Dec 3, 2014 9:00am
Quoting kotsh
Hi All, been lurking in this forum for several months now, and it has been the most useful resource I found on the internet with regards to trading! After blowing up 2 accounts I decided to start working on demo until i am profitable for at least 6 month. Thanks specially to Mike for the excellent videos and Phanti for the price action trading ebook! I would like to ask a question about divergence at key levels. I think understand the concept of regular and hidden divergence when the price is trending (up: HL/HH or down: LH/LL). My question is more...
welcome Kotsh

Glad to have you and glad you are getting on demo to get things going

You are correct based on your chart. I'm not the biggest fan of hidden divergence myself, so i'll give the tip in the case of your above chart just view it for what it is as price in a consolidation or wedge formation you drew

Be careful though zoom your chart out more and you'll get a better perspective of what price is doing. On the 4hr we can see things really choppy and in a sloppy type of bullish channel. Which shows regular divergence too. But again such a choppy market to the left i'd actually zoom to the daily for the best perspective which is price boxing.

Markets like this tend to eat up traders so i'd be most interested when price gets to the tops and bottoms of the daily box for price to stay boxed or even juicier breakouts


Keep at it and thanks for the nice comments

Mike
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  • #133,224
  • Dec 3, 2014 9:11am Dec 3, 2014 9:11am
Nice moves on CAD and GBP news this week..


CAD/CHF - BE

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GBP/JPY - 300+ pips

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  • #133,225
  • Dec 3, 2014 9:15am Dec 3, 2014 9:15am
Quoting kotsh
Hi All, been lurking in this forum for several months now, and it has been the most useful resource I found on the internet with regards to trading! After blowing up 2 accounts I decided to start working on demo until i am profitable for at least 6 month. Thanks specially to Mike for the excellent videos and Phanti for the price action trading ebook! I would like to ask a question about divergence at key levels. I think understand the concept of regular and hidden divergence when the price is trending (up: HL/HH or down: LH/LL). My question is more...

well if price is ranging, you should play the box. Playing the box means buying the bottom and sell the top, avoid playing in between. Stops below bottom for a long and vice versa for a short.

Divergence might be an additional confirmation, but not more.

If price leaves the range, we actually avoid playing the breakout itself. We wait and see for price closing outside the box and gonna play the retest.

Playing retest: If price approaches to the initially breakout level again (pole lvl) we place a trade in the breakouts direction. stop tiny behind the pole area. We get a high r:r and following the breakouts direction (mostly major trend).

Best,
J
Hero calls followed by margin calls...
  • #133,226
  • Dec 3, 2014 9:33am Dec 3, 2014 9:33am
Well I said that when I will be done with this account, I will post my results. I made this for purpose of job application. I traded there for 3 months, every month was starting on 22nd, minimum profit I needed to make was 8% but I set myself a safe 12% threshold. My trade style is price action + economic filter, I don't use any indicator more than breakout alert and equity alarm. Leverage 1:400.

My initial capital was $500 of my cash + $250 of bonus so $750. My ending capital is stated as $1130 so ~50% of growth in 3 months. I have no idea why myfxbook says it's 76%. Similar goes for maximal drawdown that was 2x smaller (about 30%) than says myfxbook. I suppose it's because of that $250 bonus but I'm not sure... I traded on micro account so every 100 lots stated is really a 1 normal lot.

Link: http://www.myfxbook.com/members/Dovi...dovilo/1040807

Now I simply hope there is still job for me
  • #133,227
  • Dec 3, 2014 9:45am Dec 3, 2014 9:45am
Quoting Dovilo
Well I said that when I will be done with this account, I will post my results. I made this for purpose of job application. I traded there for 3 months, every month was starting on 22nd, minimum profit I needed to make was 8% but I set myself a safe 12% threshold. My trade style is price action + economic filter, I don't use any indicator more than breakout alert and equity alarm. Leverage 1:400. My initial capital was $500 of my cash + $250 of bonus so $750. My ending capital is stated as $1130 so ~50% of growth in 3 months. I have no idea why...

good job dovilo.

Now just increase units step by step and keep making pips and the cash will sum up pretty quickly to a good net income.

Take care,

J
Hero calls followed by margin calls...
  • #133,228
  • Dec 3, 2014 9:53am Dec 3, 2014 9:53am
Quoting srt
{quote} Hi Prasad, Take your trades for gold & silver based upon the forex charts. Stocks & ETFs only trade 6 1/2 hours a day so the charts are missing the rest of the day that gold/silver are still trading.

you are right agree with you. Margin requirement is less on the dollar silver trade and I can afford that but the price is still stuck sideways as I post this one. Would enter the trade if it breaks resistance and moves upwards. I am fine with taking both options trades and forex trades but will be looking for sufficient confluence, PA and a good story.

There is another strategy based on price levels that I am testing out and that may give me a trade everyday.
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  • #133,229
  • Dec 3, 2014 9:55am Dec 3, 2014 9:55am
Quoting prasad99
{quote} you are right agree with you. Margin requirement is less on the dollar silver trade and I can afford that but the price is still stuck sideways as I post this one. Would enter the trade if it breaks resistance and moves upwards. I am fine with taking both options trades and forex trades but will be looking for sufficient confluence, PA and a good story. There is another strategy based on price levels that I am testing out and that may give me a trade everyday. {image}

note that you will even need a lot lot lot of patience for metals, unless you dont trade high leverage and try to catch the M1/M5 spikes
Hero calls followed by margin calls...
  • #133,230
  • Dec 3, 2014 10:06am Dec 3, 2014 10:06am
Quoting PhAnTi'
{quote} note that you will even need a lot lot lot of patience for metals, unless you dont trade high leverage and try to catch the M1/M5 spikes
Thanks for your suggestion. I understand I am just testing the waters and I take small trades so loss is minimum. I am looking at the following EURGBP chart and it almost seems like text book design. I will look for PA at the boundaries.
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  • #133,231
  • Dec 3, 2014 10:21am Dec 3, 2014 10:21am
Quoting mbqb11
{quote} Markets like this tend to eat up traders so i'd be most interested when price gets to the tops and bottoms of the daily box for price to stay boxed or even juicier breakouts {image} {image}
Quoting Winston Reed
{quote} {image} ...A wedge with an accurate lower border in an uptrend like in the example shown is all you need. A breakout of the rising TL with good PA signals a possible trade.
Quoting PhAnTi'
{quote} ..., we actually avoid playing the breakout itself. We wait and see for price closing outside the box and gonna play the retest. Playing retest: If price approaches to the initially breakout level again (pole lvl) we place a trade in the breakouts direction. stop tiny behind the pole area. We get a high r:r and following the breakouts direction (mostly major trend). Best, J
Great stuff. What I observe are the different trading styles.
  • #133,232
  • Dec 3, 2014 10:53am Dec 3, 2014 10:53am
Quoting mbqb11
i've bought a retrace on the gold daily buob back to the daily flip and massive weekly support. Being in the states ive used an ETF but they run the same {image} {image}
any surprise to see price bounce?

Simple side to side s/r , but more importantly confluence and strong areas are all you need
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  • #133,233
  • Dec 3, 2014 11:32am Dec 3, 2014 11:32am
Quoting mbqb11
{quote} any surprise to see price bounce? Simple side to side s/r , but more importantly confluence and strong areas are all you need {image}
hey mike, did you enter based on PA on a lower timeframe or just because it pulled back to the ppz and held?
  • #133,234
  • Dec 3, 2014 2:11pm Dec 3, 2014 2:11pm
Quoting mmb91
{quote}hey mike, did you enter based on PA on a lower timeframe or just because it pulled back to the ppz and held?
Hey M

Here was my original post and reasons for entering at the time of trade

http://www.forexfactory.com/showthre...30#post7913830

Best
Mike
  • #133,235
  • Dec 4, 2014 2:26am Dec 4, 2014 2:26am
Hi All,

thanks for your feedback for my divergence question. based on your replies and some more research, i wold guess it is best to NOT check for divergence unless there is a clear tend in a direction.

I found this article very helpful:
http://www.babypips.com/school/high-...vergences.html

Quoting PhAnTi'
{quote} ..., we actually avoid playing the breakout itself. We wait and see for price closing outside the box and gonna play the retest. Playing retest: If price approaches to the initially breakout level again (pole lvl) we place a trade in the breakouts direction. stop tiny behind the pole area. We get a high r:r and following the breakouts direction (mostly major trend). Best, J


i am a firm believer in this method, specially after reading Phanti's book and have been consistently making pips using it.

however one thing is not very clear for me, is when you say CLOSE outside the box. What is the criteria of "price closing outside a box" (time frame, duration, bar sizes.. etc.)

Also, how do you differentiate between
- the price moving out/reversing back into the box (like 2 long opposite bars )
- and the price breaking the level and only retracing back to the breakout level before continuing the move away from the broken box?

I saw a video of mike which explained that if the price goes back slowly, it is probably a retrace, if it goes down sharply it is probably a fake out.

But till now its not clear to me what absolute time period (not chart tinmeframe) is considered slow or fast.


I gave a lot of thought of the meaning of CLOSING of a bar and still cant make perfect sense of it.
If we think of it logically, closing of a 4H or 1H bar is an arbitrary period of time, due to different broker feeds and the markets that are open/timezones..etc..

The only value of close that makes sense to me is the weekly/monthly, because it is common across all markets and timezones.

Daily close SOMEHOW makes sense to me also, but not for big moves happening late in the NY session, because the big price move has still not been processed by Asian and European markets.

The way I think of it, is that the definition of CLOSING outside a box/level means that the price settles outside the box/level for 24 hours after a big move. That way everyone has seen the move and agrees to it.

As an example: there is good news for USD late in NY session, which pushes EUR/USD below a certain box. Now the daily closes below the box, now Asian or EUR session opens and they dont like the EUR USD being low and push it back into the box. (same price action as a pin bar but divided into 2 bars)


Would appreciate if someone sheds some more light on this.

Thanks.
  • #133,236
  • Dec 4, 2014 3:12am Dec 4, 2014 3:12am
Hi mike and everyone.

For the past two months,i have never had a loss trading this system,i got over confident and took two losses in a row all from common mistakes like trading towords ppz.how do you guys control overconfidence and how can i get my trading confidence back i did not follow money managment rules so took huge loss.lol.
  • #133,237
  • Dec 4, 2014 7:02am Dec 4, 2014 7:02am
Quoting kotsh
Hi All, thanks for your feedback for my divergence question. based on your replies and some more research, i wold guess it is best to NOT check for divergence unless there is a clear tend in a direction. I found this article very helpful: http://www.babypips.com/school/high-...vergences.html Quoting PhAnTi' {quote} ..., we actually avoid playing the breakout itself. We wait and see for price closing outside the box...
Trading a breakout is valid if there is good PA and confluence supporting the trade. Playing breakouts by themselves is tough. Playing breakouts is highly dependant
on the accuracy of the pattern being broken whether it is a wedge, box or TL. If the borders of the pattern are jagged or fuzzy then the breakout will also be in question. The close is often a function of the time frame. If your observing a pattern that has formed on a weekly time frame then trading a breakout on a 1 hour time frame doesn't make sense. However let's say your watching a pattern that developed on the H4 time frame then a breakout with good PA on the H1 does make sense. Don't try to validate the breakout by dropping to deep into lower time frames.

But I don't completely agree with Phanti on wating for a retrace to play a breakout although often this is the best way to play a breakout. Playing breakouts as they occur with good PA and confluence is absolutely valid.
  • #133,238
  • Dec 4, 2014 8:56am Dec 4, 2014 8:56am
GBP/CHF - nice drop after news...

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  • #133,239
  • Dec 4, 2014 9:01am Dec 4, 2014 9:01am
Quoting zamfir
GBP/CHF - nice drop after news... {image}
nice one.

Maybe next time can post earlier for people to enter too.

thks
  • #133,240
  • Dec 4, 2014 9:08am Dec 4, 2014 9:08am
Quoting keziahpie
{quote} nice one. Maybe next time can post earlier for people to enter too. thks
Sorry buddy, i am not in that business.
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